ADP reported on Wednesday that private employment expanded at a rapid pace in May, providing further evidence of labor market stability.
The payroll firm said companies added 122,000 employees in the month, up from 105,000 in April and above the Dow Jones consensus estimate of 110,000. May was the strongest month since January 2025. April’s total was revised downward by 4,000 cases.
Unlike last month, when job growth was concentrated in health care and a few other sectors, the increase was more widespread. Eight of the 10 sectors in the ADP track saw increases, with employment spread evenly across both company size and geography.
Education and health services once again led the way in terms of employment, with an increase of 57,000 people, followed by trade, transportation and public services, which added 36,000, professional and business services, which added 11,000, and construction, leisure and hospitality, which both added 8,000.
Information services fell by 9,000 jobs, likely due to the growth in artificial intelligence, while natural resources and mining also reported a loss, down by 3,000 jobs.
“May employment was the most widespread in years,” said Nela Richardson, chief economist at ADP. “The labor market continues to show sustained momentum heading into the summer hiring season.”
Companies with fewer than 50 employees added 67,000 new employees, companies with 500 or more employees added 40,000, and midsize companies accounted for 17,000 new jobs.
In terms of salaries, annual salaries for those who stayed in their jobs increased by 4.4%, the same as in April, while salary growth for those who changed jobs slowed to 6.5%.
Stock market futures were mixed following the announcement, but U.S. Treasury yields rose.
The report was released two days before the Bureau of Labor Statistics releases nonfarm payrolls for May. Wall Street consensus is for the unemployment rate to hold steady at 4.3%, with an increase of 80,000 jobs expected from 115,000 in April.
Fed officials will be closely monitoring employment data ahead of their June 16-17 policy meeting. Markets are pricing in a virtual certainty that the central bank will keep interest rates unchanged in the range of 3.5% to 3.75%.
